Ethena Publicly Defines USDe Oracle Design After October Depeg Confirms $9B Collateral Resilience

At 09:18 UTC on October 12, 2025, G | Ethena (@gdog97_) published a formal post, which detailed the protocol oracle design and risk management system of USDe, the synthetic dollar by Ethena Labs. This announcement came after the USDe lost its peg to record liquidations on October 10, following a crash in the market, and this time regained hours later. The thread, with a chart named USDe (Curve) vs USDC (Binance) visualized the 0.3% gap between the USDe and the USDC prices over a four-hour period of time, between 20:00 and 00:00 UTC on October 10. The post intends to remove any uncertainty regarding the source pricing of Ethena oracles and the functioning of collateral backing when the market is under stress.

While we share these suggestions privately with any partner we work with across both DeFi and CeFi, want to surface this publicly so there is zero doubt going forward on what we view as appropriate oracle design and risk management for USDe: pic.twitter.com/lb4OeaGn9Y

— G | Ethena (@gdog97_) October 12, 2025

Ethena Publishes Public Framework on Oracle Design

The common chart is the comparison between the USDe rates on Curve (orange line) and the USDC rates on Binance (blue line). Both stablecoins were stable around 20:00-21:00 when they were at approximately 0.999. At approximately 21:00 the USDe fell to 0.996 (a deviation of 30 basis points) before settling around 0.998 at 00:00. This implies that even though USDe has gone through temporary turbulence in the decentralized markets, it has recovered in several hours, which is in line with the Ethena assertion of the dislocation being temporal, rather than discontinuous.

The Curve chart displayed slight variations, but Binance orderbook data indicated that it had fallen to $0.65, which Ethena explained by flaws in the design of the Oracle. Moreover, Binance allegedly limited the amount of deposits and withdrawals that occurred during the incident making market makers unable to arbitrage the spread, which further exaggerated the perceived loss of peg.

USDe Redeemed 2B in 24Hours

The mint and redeem systems of USDe performed 24 hours a day over the course of the event, with more than a billion dollars being withdrawn in hours and 2 billion dollars being withdrawn in 24 hours, according to Ethena. Oracle and Risk Management Guidelines posted in common. The post has publicly described the oracle and risk management framework used by Ethena which consists of:

• Several price providers: Curve, Uniswap, and centralized exchanges, so that there is redundancy.
• Monitoring on collateral: On-chain PoR with algorithmic collateral rebalancing.
• Separation between transient price dislocation and irreversible impairment.
• Real time failover mechanism to scale oracle feeds when there are liquidity abnormalities.

Ethena said these practices are shared through DeFi and CeFi partners but are currently open to disclose them in order to dispel any uncertainty about transparency and strength.

Market Response and Expansive Situ

This was clarified after an unstable week in the crypto markets due to a 100% tariff threat on China by the U.S. administration, which resulted in a massive liquidation cascade across leveraged positions. In the course of the event, ETH was trading below the level of $3,800, whilst BTC momentarily touched the level of $57,000.

After Ethena made this statement, the current USDe leveled at 0.999 and on-chain liquidity depth on Curve grew by 18 percent in 12 hours, as shown by the DeFiLlama data. According to analysts at Kaiko, CoinMetadata, Ethena has led a new standard in terms of transparency in releasing oracle instructions, and this could have implications on other algorithmic or synthetic dollar issuers.